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Exam 18: The Market for the Factors of Production

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Question 51

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Which of the following is not correct?

A) In a labor market,the wage adjusts to balance the supply and demand for labor.
B) A profit-maximizing firm hires workers so long as the wage rate exceeds the value of the marginal product of labor.
C) Any event that changes the supply or demand for labor must change the equilibrium wage.
D) Any event that changes the supply or demand for labor must change the value of the marginal product.

E) All of the above
F) A) and D)

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Question 52

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Jessica receives a raise at her current part-time job from $9 to $11 per hour.If her labor supply curve is backward sloping,she will work fewer hours after receiving the pay raise.

A) True
B) False

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Question 53

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According to the neoclassical theory of distribution,the wages paid to John Deere tractor assembly line workers are higher than those paid to fast food workers because assembly line workers

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,the equilibrium wage of health care employees would

A firm's demand for labor is derived from its decision to supply a good in another market.

Table 18-1 -Refer to Table 18-1.Suppose that the firm pays its workers $45 per day.Each unit of output sells for $10.How many days of labor should the firm hire?

Figure 18-1.On the graph,L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1.The figure illustrates the

Table 18-1 -Refer to Table 18-1.What is the marginal product of the second worker?

Figure 18-7 -Refer to Figure 18-7.Which of the following would shift the labor supply curve from S₁ to S₂?

The demand for computer programmers is inseparably tied to the supply of computer software.

Which of the following would shift a market labor supply curve to the right?

Table 18-1 -Refer to Table 18-1.Suppose that the firm pays its workers $50 per day.Each unit of output sells for $20.How many days of labor should the firm hire?

Figure 18-8 This figure below shows the labor market for automobile workers.The curve labeled S is the labor supply curve,and the curves labeled D₁ and D₂ are the labor demand curves.On the horizontal axis,L represents the quantity of labor in the market. -Refer to Figure 18-8.Which of the following events would most likely explain a shift of the labor-demand curve from D₂ back to D₁?

Consider the labor market for heath care workers.Because of the aging population in the United States,the output price for health care services has increased.Holding all else equal,in the labor market for health care employees the equilibrium wage

An event that changes the supply of any factor of production can alter the earnings of all the factors.

Describe the difference between the purchase price of capital and the rental price of capital.If you know the value of marginal product from the flow of capital services,how would you determine the market price for the capital stock?

The factors of production are best defined as the

Suppose that the market for labor is initially in equilibrium.An increase in immigration will cause the equilibrium wage

Which of the following would be an example of capital for a retail gasoline station? (i) The gas tanks and pumps (ii) The service attendants' time (iii) The plot of land on which the station sits

Suppose an influenza pandemic were to significantly decrease the population of a country.We would predict a decrease in the marginal product of land in that country.